Managing our money better is vital if we are to have financial independence. Currently, inflation is high. The cost of living has been growing for years and has now turned into the boogie man for most American families. Jobs have been trying to give more raises, but most getting the raise are still just breaking even. In times like these we must be more disciplined and create a financial plan. If we don’t create a plan and take time to listen to the economic reports coming out; we will feel more financial strain because we were blindsided. So, what are some ways that we can manage our money better?
- Create a budget
One way to manage our money better is by creating and sticking to a budget. A budget can help us keep track of our income and expenses, and make sure we are spending our money wisely. There are many ways to create a budget. One way is to create a detailed spreadsheet with all of our expenses and income listed out. Another way can be to set a monthly budget allowance for each category of our spending.
2. Make sure we pay our bills on time
Staying on top of your bills also allows you to keep tabs on your spending, so you can make sure that you’re not overspending each month. Additionally, being mindful of your bill payments can help you build a good credit history, which can come in handy down the road if you need to borrow money for a big purchase or if you decide to lease an apartment.
(Credit cards)
Paying your credit card bills on time is important to maintain a good credit score. Here are some tips to help you manage your money and make sure your payments are on time:
- Create a budget and stick to it.
- Set up a payment plan
- Use a calendar or planner to keep track of due dates.
- Use the Autopay feature
(Student loans)
By making our student loan payments on-time payments, you’ll avoid late fees and penalties that could end up costing more. Paying our loan on time can help improve our credit score. Here are some ways we can make sure that we pay our student loans on time.
- Set up automatic payments through your bank account or credit card.
- Sign up for text or email alerts reminding you when your payment is due.
- Keep track of your loan balance and due dates using a personal finance app or online tool.
(Mortgage/rent)
Paying our mortgage on time can help us manage our money better in a few ways. First, it helps us stay disciplined with our spending. When we know that we have to make a payment each month, it can help keep us from overspending. Also, paying our mortgage on time helps us build our credit history. A good credit history can help us get low interest rates on loans in the future. This can save us a lot of money over time.
3. Consider saving in a high yield savings account
A high yield savings account is a great way to manage your money better. These accounts offer high interest rates, which can help you to grow your savings faster. Additionally, high yield savings accounts often have fewer fees than traditional checking or savings accounts. This can help you to keep more of your money in your account, where it can work for you.
4. Recurring charges could be using up your gas money…
Another way to manage our money better is by eliminating some recurring charges. Recurring charges can really add up over time, and they can be a big drain on our resources. If we can get rid of some of these charges, we can free up more money to use for other things, like gas.
What are some ways we can eliminate recurring charges?
One way is to cancel any subscriptions or memberships that we no longer use. Another way is to switch to a cheaper service plan or provider. And finally, we can try to negotiate a lower rate with our current service providers.
5. Pay yourself first
There are a few ways that paying ourselves first can help us manage our money better. For one, it helps us to stay disciplined with our spending. If we know that we must put some of our money aside for ourselves before we spend it, we’re less likely to overspend. When we know that a certain percentage of our income is set aside for savings, we’re more likely to save that money rather than spend it. Finally, paying ourselves first can help us to be more mindful of our finances.
6. Create a plan to pay down debt
Paying down our debt is another way to manage our money better. By paying down our debt we can improve our credit score and lower our credit utilization. Also, we can save money by paying down our debt.
How can we pay down our debt?
- Come up with a budget.
- Take on a side job or Start a Scalable Side hustle
- Cut down on expenses
- Earn more money
- Seek help from a financial advisor
- Find ways your money can work for you
Making money work for us can help to manage our money better by teaching us how to be responsible with our finances. When we have to work hard to earn our money, we are less likely to waste it. Additionally, being successful in managing our money can help to boost our confidence and improve our overall financial situation. Having money work for us can provide us with a stable source of income. This can help to give us peace of mind and allow us to focus on other important things in our lives.
7. What are some ways money works for us?
- Real Estate
- Stocks
- Bonds
- Owning a business
- Compounding Interest
8. Join the 700-score club…FICO
Having good credit can help us manage our money better in several ways. For one, our credit score reflects our overall credit history and how likely we are to repay our debts. A high credit score means that lenders view us as a low-risk borrower, which can lead to lower interest rates on loans and other lines of credit. This can save us money over time and make it easier to manage our finances. Having good credit can make it easier to get approved for certain types of insurance policies, such as life or health insurance. This is because insurance providers often look at our credit score when deciding whether to offer us a policy.
What is a FICO score?
A FICO score is a three-digit number lenders use to help them decide whether or not to give us a loan, and at what interest rate. It’s based on information in your credit report. This will include how much we owe on our current loans and credit cards, and how regularly we make payments.
What is a Vantage score?
A Vantage Score ranges from 300 to 850. A Vantage Score considers more factors than the FICO score, which may make it a better indicator of your creditworthiness. For example, the Vantage Score considers rent payments and utility payments in its calculation, while the FICO score does not. Most lenders use our FICO scores and not our Vantage scores when assessing risk.
9. Contribute to your retirement
There are several ways that contributing to our retirement can help us manage our money better. First, when we contribute regularly, we’re essentially making ourselves a part of a retirement savings plan. This means that our money will be working for us even when we’re no longer able to work, and it can help ensure that we have a comfortable retirement. Also, contributing to our retirement can help us stay disciplined with our spending. When we know we need to set money aside each month to contribute to our retirement savings, we’re less likely to spend thoughtlessly.
10. Create the “Nest Egg” as early as possible
One of the best ways to manage our money better is to create a nest egg. A nest egg is simply a sum of money that we have saved up over time, which we can use in case of an emergency or for other financial needs. Having a nest egg gives us a sense of security and peace of mind, knowing that we have a financial cushion to fall back on if needed. Another reason creating a nest egg early is important is because it can help us compound our money. Compounding occurs when our earnings from investments (or savings) reinvested earns interest on the previous principal as well as the new interest. This can create a snowball effect that can add up over time!
11. Make sure you’re not being overcharged for insurance
Not being overcharged for insurance is another way we can manage our money better. We need to be sure to shop around for the best rates and deals on insurance, and not just go with the first option that we come across. Some policies may have lower premiums but higher deductibles, while others may have higher premiums but lower deductibles. It’s important to find a policy that fits your needs and your budget. Not being overcharged for insurance, we can save ourselves a lot of money in the long run. This money can then be put towards other important expenses, such as retirement savings or paying off debt.
12. Check your phone, tv, and internet bill and make sure you’re not overpaying
Managing our money better also includes not being overcharged for bills. There are a few ways to avoid being overcharged on your bills. First, review your monthly statements and compare the charges to what you were expecting. If you see any discrepancies, call your provider right away. Often, providers will make mistakes on bills, so it’s important to investigate and correct them as soon as possible. Also shop around for the best rates on services like cellular phone plans, cable TV, and internet service.
13. Never stop learning about improving your finances
Understanding basic financial concepts can help us make informed decisions about our money and how to use it most effectively. Learning about budgeting, saving, investing, and retirement planning can help us put ourselves in a better position financially. When learning about personal finance, it’s also important to be aware of the current economic conditions. Keeping tabs on stock market news and global economic indicators can help us understand how current events may impact our finances.
14. Spend time with those who are disciplined in their financial decisions
By observing how someone else handles their money, we can learn from their mistakes and successes. We can also get advice and tips on how to manage our own money better. By doing this, we can improve our financial situation and be better prepared for the future. Remember you don’t have to be on your financial independence journey alone. There are people who can help us to sharpen our skills and help us to accomplish the goal(s) we are trying to achieve.
15. Don’t forget about the long term
Investing for the long-term can help us manage our money better in a few ways. First, it can help us grow our money so that we have more to work with in the future. Second, it can help us avoid making short-term decisions that might not be in our best interests financially. And finally, it can teach us about responsible financial planning and how to save for our future.
What are some ways that we can invest for the long term?
Invest in stocks or mutual funds. Doing so can provide us with a financial cushion against inflation and help us build wealth over time. However, it’s important to remember that there is risk involved with any investment, so we should always do our research before making any decisions. By taking the time to learn about different investment options, we can make sound decisions that will benefit us in the long run. Another way we can invest for the long term is by investing in our health so that when we are older we can be more healthy.
16. Choose the right times to buy your vacation/ business flights
By being smart about when we buy our tickets, we can manage our money better and ensure that we’re getting the most for our hard-earned dollars. When it comes to travel, making the right decisions about when to buy our tickets can save us a lot of money. Buying our flights too far in advance can mean that we pay more than we need to, while waiting until the last minute can mean that there are no seats left on our desired flight. By timing our purchase correctly, we can get the best deal on our tickets.
What are some tools we could use to help us save money when buying a plane ticket at the right time?
Kayak is a popular tool to compare prices for flights between different airlines and dates. Another great way to save money on plane tickets is to sign up for travel alerts. Airlines and travel websites often offer discounts and special deals to people who are subscribed to their mailing lists or alerts. This can be a great way to get a cheap ticket without having to do any extra work. I use the Hopper App to alert me when I am looking for deals on my flights.
17. Book your hotel/ airbnb when the price is right
When it comes to booking travel, it’s important to be strategic about how we spend our money. By taking advantage of discounts and special offers, we can get more for our dollar and make the most of our travel budget. Booking a hotel or Airbnb when the price is right can help us do just that.
What are some websites we can use to book our hotels, Airbnb, and vacation home stays?
18. Avoid spending more just because you can afford it. It’s okay to be frugal!
Being frugal can help us save money on groceries, utilities, and other everyday expenses. By being mindful of how we spend our money, we can make sure that it goes towards things that are important to us. Ultimately, being frugal can help us manage our finances more effectively and improve our overall financial wellbeing. By being responsible financially we can avoid making costly mistakes. Just because we can afford a G-Wagon monthly payment doesn’t mean we should take on the payment…That is unless you’re deciding to turn the G-Wagon into an asset.
19. Create a personal/ family balance sheet
Creating a personal or family balance sheet can help us manage our money better. This is because it allows us to see our financial picture in black and white, making it easier to spot where we need to make changes. For example, if we are spending more than we earn, the balance sheet will show us this and we can then take steps to become more frugal. The balance sheet can also help us make important financial decisions. For instance, if we are thinking about buying a house, the balance sheet can help us determine whether we can afford the monthly mortgage payments. Similarly, if we are considering starting a business, the balance sheet can help us figure out how much money we need to cover our costs.
What are some things that we track on a family balance sheet?
- Income and expenses
- Assets and liabilities
- Net worth
An asset, in short, is something that creates cashflows and puts money in our pockets. A liability is something that takes away money from us. Net worth is the value that we have in assets minus the liabilities we owe.
20. Hold yourself accountable
Holding ourselves accountable means taking responsibility for our own actions and outcomes. When it comes to our finances, this means being honest with ourselves about our spending habits and being willing to make changes to achieve our financial goals. If we manage our money better, we can ensure that we stay on track with our budget. A good start to hold ourselves accountable is creating a plan and having discipline.
Bonus: Tithe
Tithing helps us stay disciplined with our finances. It teaches us how to save for the future and plan for the unexpected. When we know that we give away 10% of our income, we are more likely to be careful with the rest of our money. Giving back to God is one of the most important things we can do in our lives. Not only does it help us grow closer to Him, but it also helps us manage our money better.
Conclusion: Managing our money is one of the most important things we can do to secure our financial independence. While it may seem daunting, there are plenty of ways we can work towards improving our relationship with money. We hope this list has given you some ideas on how to get started. What’s your favorite way to manage your finances? Let us know down below! Check out my other blog 20 Examples of Personal Strategic Financial Planning.